German Of The Day: Freier Fall

That means freefall.

Freefall

German manufacturing reports industry ‘in freefall’ – Key survey points to weakest sentiment in nine years.

The Ifo Institute’s manufacturing business climate index slumped to minus 4.3 in July from positive 1.3 the previous month. The reading was the lowest in more than nine years and echoes a separate survey released on Wednesday that pointed to mounting troubles in Europe’s powerhouse economy.

“No improvement is expected in the short term, as businesses are looking ahead to the next six months with more pessimism.”

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German Of The Day: Erfolglos

And while we’re at it, fassungslos und ahnungslos.

Fassungslos

That means unsuccessful, stunned and clueless, respectively. And all three apply to Germany’s foreign minister Heiko Maas, who just got a taste of the real world in Tehran during his pitiful attempt to salvage what is left of the 2015 nuclear agreement with Iran – for world peace, of course (and for German corporate interests in the region, coincidentally).

The German foreign minister appeared somehow surprised to discover that the mullahs are upset with Europe as “so far, we have not seen practical and tangible steps from the Europeans to guarantee Iran’s interests.” This is because, well, they can’t. If you aim at being weak long and hard  enough then weak you shall be. But there’s a bright side to this, I guess. German diplomacy would not be German diplomacy without the foreign ministers fervent hope that “ways can be found to reduce current tensions through dialogue.” Good luck with that, Heiko.

By the way, anybody in Germany who repeats the word “dialogue” long and hard enough can become German foreign minister, too.

Außenminister Maas in Iran – Zwischen erfolglos und fassungslos.

I’ll Go With “Systematic Issue”

Specifically, it’s a systematic decline caused by systematic dishonesty and corruption.

Deutsche Bank

The simultaneous decline of Volkswagen, Deutsche Bank (DB), and Bayer has been nothing short of stunning. It raises the question as to whether it is merely coincidence, or if there is a larger systemic issue in play.

At Harvard’s 368th Commencement this past Thursday, German Chancellor Angela Merkel spoke of her life experiences growing up during the Cold War in post World War II Europe.

On this cool and overcast day, she also gave advice to the graduates on how to live their lives. She obliquely mentioned the trade war and indirectly criticized President Donald Trump — which got a round of applause. She even quoted the German poet, Hermann Hesse, saying “in all beginnings dwells a magic force for guarding us and helping us to live.”

There was one topic, however, that Merkel didn’t broach, perhaps not surprising given the celebratory nature of the day. Merkel made no mention of the economic dysfunction and even decay that seems to be infecting Germany — particularly when it comes to Germany’s largest and most prominent companies. The simultaneous decline of Volkswagen, Deutsche Bank (DB), and Bayer has been nothing short of stunning. It raises the question as to whether it is merely coincidence, or if there is a larger systemic issue in play. Either way, something is rotten in the state of Germany.

German Of The Day: Naivität

That means naivete, as in being gullible or simple-minded.

China

Here’s an example: Industry Leaders Accuse Europe of Naivete with Respect to China – China’s aggressive approach in extending its economic power is causing concern among European companies. They demand a tougher approach from Brussels – and a convincing vision.

Good luck with that, European industry leaders. “Europe” doesn’t have time to deal with little issues like that at the moment, nor will it have any time in the near future. It is too occupied with self-inflicted problems like uncontrolled migration and Brexit (and the ensuing financial crisis) and placing the next batch of non-elected and unaccountable EU eurocrats in power. But once all that is taken care of, who knows? That little Chinese issue might just get tackled, too.

Die aggressive Vorgehensweise Chinas bei der Ausdehnung seiner Wirtschaftsmacht bereitet europäischen Unternehmern Sorgen. Sie fordern eine härtere Gangart von Brüssel – und eine überzeugende Vision.

Stop The Presses!

(Do they even have presses anymore?) This just in, folks: Some German industrial dynasties have a Nazi past!

Nazi

Holy freakin’ Scheiße! Once this leaks it’s going to ruin the reputation of all the other German industrial dynasties out there. With a Nazi past, I mean. You know, like every single German industrial dynasty that exists? Without exception?

I’m shocked. And stunned. Just like those dynastists in this particular German industrial dynasty who just found out about it themselves. For, like, the very first time. Honest.

A German industrial dynasty with big stakes in various international brands has admitted brutality towards slave labourers during Nazi rule.

A partner in JAB Holding, Peter Harf, said the Reimann family was shocked by links to Nazi abuses, discovered by the Bild am Sonntag newspaper in archives.

“We were ashamed and turned white. You cannot gloss over any of that. Those crimes are abhorrent.”

We’re All Going To Die!

When the Brexit hits the fan, remember?

Brexit

It’s quite odd. Germans, notoriously nervous by nature, don’t seem terribly worried about Brexit these days at all. I guess there’s only so much you can worry about at any given time. Even if you’re a German.

Dead calm: Brexit not in top 10 of German businesses’ priorities – With five weeks to March 29th, Germans are worried – about everything but Brexit.

Commuters fear inner-city bans on diesel cars. Politicians are fighting over renovating – and digitising – German schools. Police are battling criminal Arab clans.

“I don’t know why Germany, all in all, is so relaxed about this.”

German Of The Day: Auftragsschwund

That means a decrease in orders.

Auftragsschwund

Did the boom just go boom?

Orders slid 1 percent from October, and posted a year-on-year decline of 4.3 percent, the biggest in more than six years. The monthly decline was partly due to aircraft orders, which had jumped in October, as well as weakness in the euro area.

While there are questions over the outlook for the German economy, the euro area’s biggest, the Bundesbank has long expressed confidence that it will overcome the slump seen in mid-2018. Responding to the factory data on Monday, Commerzbank said the decline “should not be over interpreted.”

“Wir blicken abwärts.”

To Rival Silicon Valley?

Good luck with that. Honest. It’s great that big industry finally wants to pump some money into Berlin again but keep your pants on already, Siemens.

Siemensstadt

The German engineering giant has unveiled plans to build a huge innovation campus in Berlin, harking back to its early days in the German capital and aiming to rival Silicon Valley in the United States.

Investment in a new campus to be called Siemensstadt 2.0 (Siemens City 2.0) will come in at €600 million ($680 million) on offices and residential accommodation, as well as laboratories and production plants, according to an agreement signed by Berlin Mayor Michael Müller and Siemens executive member Cedrik Neike on Wednesday.

The plan is to transform the historic Siemens site in Berlin-Spandau into a location for research and startup centers by 2030.

Der Weltkonzern baut in Berlin für 600 Millionen Euro seinen Zukunfts-Campus. Mit 2000 Wohnungen, Forschungslabors, Geschäften, Schulen und eigenem S-Bahn-Anschluss

When Had We Left The Jungle?

I wasn’t aware that we had.

Jungle

WTO Faces Existential Threat in Times of Trump -U.S. President Donald Trump has set his sights squarely on the World Trade Organization in Geneva. Even its critics are worried that without the organization, the world of trade would revert to the law of the jungle.

The U.S. and other industrialized nations made several concessions to developing economies when the WTO was founded in 1995 and significantly reduced their tariffs. In return, they were able to push through stronger protections for intellectual property. They hoped that the strategy would help slow China’s rise.

But from the U.S. perspective, the system has not been beneficial. And once China joined the WTO in 2001, that dissatisfaction only grew, partly because the Chinese proved adept at taking advantage of the rules. Even today, there is significant dissent within the WTO because the economic superpower China is still classified as a “developing nation” by the organization, which gives it certain privileges. On the other hand, China is fighting for recognition as a market economy, to which both the U.S. and the European Union are opposed because it would mean they could no longer defend themselves against state-subsidized Chinese exports with anti-dumping duties.

On top of all that, the WTO is facing a more fundamental problem: its size and its sluggishness. Negotiating rounds focused on removing tariffs have become increasingly complex. And because everything is up for negotiation at the same time, every member state can paralyze the process by simply exercising its veto. The Doha Round, launched in 2001, is a perfect example: It never achieved any results and has become symbolic of the WTO’s failure.

“The problems are coming from the behavior of a single country that would like to return to the jungle.”

“Not Deployable For Collective Defense”

Three years ago, Germany’s military made headlines when it used broomsticks instead of machine guns during a NATO exercise because of a shortage of equipment. The lack of real weapons in the European Union’s most populous nation was seen as symptomatic of how underfunded its military has long been.

Germany

One Russian annexation later, if anything, the state of affairs has only gotten worse, according to the parliamentary commissioner for the country’s armed forces.

He has now reached the conclusion that the German military is virtually “not deployable for collective defense,” at the moment. Independent commissioner Hans-Peter Bartels also indicated in a recent interview that Germany was unprepared for the possibility of a larger conflict even though smaller operations abroad may still be possible.

Meanwhile… Rising exports, Turkish tanks fuel German arms sales debate.

Again: Germany’s army is an alibi army that will never be used for anything other than to make Germans feel better (less worse?) about being 1) pacifists while being at the same time 2) the world’s third largest weapons exporter. Remember this when the next demand for them to spend 2 percent GDP on their defense comes up and they start to fidget – and get away with not spending it again.